Question:
Calculate the amount due if Jennifer borrowed a sum of $3250 at 7% simple interest for 4 years.
Correct Answer
$4160
Solution And Explanation
Solution
Given,
Principal (P) = $3250
Rate of Simple Interest (SI) = 7%
Time (t) = 4 years
Thus, Amount (A) = ?
The Rate of Interest is always calculated per annum, i.e. per year.
Thus, here 7% simple interest means, Rate of Simple Interest (SI) is 7% per annum.
Method (1) Using Formula
Calculation of Simple Interest
Formula to Calculate Simple Interest
Simple Interest (SI) = Principal × Rate × Time
Thus, Simple Interest (SI) = $3250 × 7% × 4
= $3250 ×7/100 × 4
= 3250 × 7 × 4/100
= 22750 × 4/100
= 91000/100
= $910
Thus, Simple Interest = $910
Calculation of Amount
The total money paid to the lender by a borrower is called the Amount.
In other words, sum of priciple and interest is called the Amount.
Formula to Calculate the Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $910
= $4160
Thus, Amount to be paid = $4160 Answer
Method (2)
Calculation of Amount when Principal, Rate of Simple Interest and Time are given
Calculation of Amount directly using Principal, SI, and Time
Formula to calculate the Amount
Amount (A) = Principal (P) + Principal(P) × Rate of Interest (SI) × Time (t)
⇒ A = P + PRT
Here in the question, P = $3250
Rate of Simple Interest (SI) or (R) = 7%
And, Time (t) = 4 years
Thus, Amount (A)
= $3250 + ($3250 × 7% × 4)
= $3250 + ($3250 ×7/100 × 4)
= $3250 + (3250 × 7 × 4/100)
= $3250 + (22750 × 4/100)
= $3250 + (91000/100)
= $3250 + $910 = $4160
Thus, Amount (A) to be paid = $4160 Answer
Method (3) Unitary Method
Calculation of Amount using Unitary Method
Calculation of Interest using Unitary Method
Here, given Rate of Simple Interest = 7%
This, means, $7 per $100 per year
∵ For $100, the simple interest for 1 year = $7
∴ For $1, the simple interest for 1 year = 7/100
∴ For $3250, the simple interest in 1 year
= 7/100 × 3250
= 7 × 3250/100
= 22750/100 = $227.5
Thus, simple interest for 1 year = $227.5
Therefore, simple interest for 4 years
= Simple interest for 1 year × 4
= $227.5 × 4 = $910
Thus, Simple Interest (SI) = $910
Calculation of Amount
Amount = Principal + Interest
Thus, Amount = $3250 + $910
= $4160
Thus, Amount to be paid = $4160 Answer
Similar Questions
(1) What amount does Thomas have to pay after 5 years if he takes a loan of $3800 at 3% simple interest?
(2) Find the amount to be paid if Mary borrowed a sum of $5050 at 8% simple interest for 8 years.
(3) If Mary paid $3538 to settle his loan which he had taken 4 years before at a simple interest of 4%, then find the loan taken.
(4) What amount does John have to pay after 5 years if he takes a loan of $3200 at 4% simple interest?
(5) Calculate the amount due if Patricia borrowed a sum of $3150 at 8% simple interest for 3 years.
(6) Barbara took a loan of $5100 at the rate of 8% simple interest per annum. If he paid an amount of $8364 to clear the loan, then find the time period of the loan.
(7) Nancy took a loan of $6300 at the rate of 6% simple interest per annum. If he paid an amount of $8946 to clear the loan, then find the time period of the loan.
(8) What amount does Charles have to pay after 5 years if he takes a loan of $3900 at 2% simple interest?
(9) Lisa took a loan of $6100 at the rate of 6% simple interest per annum. If he paid an amount of $8296 to clear the loan, then find the time period of the loan.
(10) Find the amount to be paid if Elizabeth borrowed a sum of $5450 at 2% simple interest for 8 years.